To better understand our company — and our opportunity — we believe it
is important to begin with the basic drivers of fertilizer demand. Our story
is one of global development: millions of people with rising incomes want
to feed their families better diets with high-quality fruits and vegetables
and protein from meat. With pressure on global crop supplies mounting,
the need to sustainably increase production is clear. We believe that
fertilizer will play a key role in achieving this, and that the agronomic and
economic opportunities which exist today — and are expected in the
years ahead — will encourage farmers to apply more fertilizer, especially
potash.

Fertilizer 101

Overview of PotashCorp and Its Industry

Global Development Story

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World Population
Shift to Urban Areas in Developing Countries
Global population is currently rising by about 75 million every year. Almost
800 million people â&#x20AC;&#x201D; more than twice the number living in North America
today â&#x20AC;&#x201D; are expected to be added to the current population by 2020.
More food must be produced to feed us all.
This growth is occurring at the same time the composition of the world
population is changing. Most growth is occurring in developing countries,
particularly in urban areas. Today, one of every two people lives in a
metropolitan area; by 2050, that figure is expected to rise to more than
two-thirds of the global population. This is an important shift, as urban
consumers tend to eat more and better balanced diets. In China, those in
an urban population consume nearly 75 percent more meat and almost 25
percent more fruits and vegetables.
Source: United Nations
Last updated: Jun 4, 2013

Fertilizer 101

Global Development Story

World Population

Overview of PotashCorp and Its Industry

Global Development Story

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World GDP per Capita
Economic Growth Led by Large Developing Countries
Many countries with rapidly rising populations are also leaders in global
economic growth. Although short-term fluctuations will occur, the
economies of China, India and other developing countries are expected to
continue to expand, enhancing global economic growth for decades.
As economies grow and individual incomes rise, history tells us that
people in emerging nations will choose to improve their diets. Ongoing
economic growth is expected to continue to increase the affordability of
and desire for more and better food.

Source: IMF, United Nations, PotashC orp
Last updated: Jun 4, 2013

Fertilizer 101

Global Development Story

World GDP per Capita

Overview of PotashCorp and Its Industry

Global Development Story

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Daily Caloric Intake per Capita
Food Consumption Increasing, Diets Better Balanced
Many people in developing countries are adopting better diets as their
incomes improve. Brazil, China and Indonesia have experienced significant
increases in the daily intake of fruits, vegetables and protein from meat,
eggs and fish as people move away from starch-based diets.
The shift to better diets is just beginning in other parts of the developing
world, including India, where fruits and vegetables are becoming a bigger
component of the daily diet and protein consumption has slowly started to
increase.
This dietary change â&#x20AC;&#x201D; couple with population growth â&#x20AC;&#x201D; is expected to be
a key driver of global food demand.

World Grain and Oilseed Demand
Global Food Demand Shows No Sign of Abating
While rising global demand for food is significant, it is not a new
development. Demand for grain and oilseeds has been growing for many
years. Oilseed demand has nearly tripled and grain demand is up 50
percent over the past two decades.
Even during periods of economic difficulty, the demand for grain and
oilseeds has been resilient.

Source: USDA, PotashC orp
Last updated: Jun 4, 2013

Fertilizer 101

Global Development Story

World Grain and Oilseed Demand

Overview of PotashCorp and Its Industry

Global Development Story

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Arable Land per Capita
Rising Population Strains Available Farmland
Less arable land per person is available for agriculture as populations rise
and urban areas expand. With a finite land base and an expanding
population, this decades-long trend is expected to continue.
The strain on arable land is most pronounced in developing countries,
where less than 0.2 hectares per person is available for crop and animal
production. These are the countries with the greatest need to raise food
production, which highlights the importance of increasing long-term crop
productivity.

Source: FAO , United Nations
Last updated: Jun 4, 2013

Fertilizer 101

Global Development Story

Arable Land per Capita

Overview of PotashCorp and Its Industry

Global Development Story

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Renewable Water Profile
Water Availability an Increasing Concern
Water availability is a growing concern in many countries. Over the last
four decades, renewable water resources per capita have declined by
nearly 50 percent in the developing world, straining water supply even as
demand for agriculture and industrial purposes has risen.
The competition for water in developing countries is unlikely to slow as
populations rise and economies grow. We believe agriculture will have to
use its share of water efficiently, and fertilizer â&#x20AC;&#x201D; especially potash, which
helps plants retain water â&#x20AC;&#x201D; is expected to play an important role in
enabling this efficient use.

World Grain Production and Consumption
Demand for Grain Has Outstripped Production
Crop production has struggled to keep pace with rising grain consumption
for the last few decades. The pressure on global grain supply has been
magnified in recent years due to adverse weather in many growing
regions and a limited inventory cushion. This led to significant demand
rationing through the 2012/13 crop year.
While weather will continue to play a significant role in determining the
yield potential of each year's crop, the current strain on global grain
supply highlights the importance of proper soil fertility for improving yields,
especially under difficult growing conditions.

World Grain Stock-to-Use Ratios
Grain Inventories Expected to Remain Tight
Repeated grain production deficits have reduced global inventories over
the last decade, leaving them well below their historical levels and with
little margin for error to meet the challenge of rising demand. When grain
stocks are low, a production deficit in one year is not easily overcome and
multiple years of above-average yields are typically required to make a
positive impact on supplies.
With land and water use already constrained, we believe a renewed
commitment to high-yield farming, including proper fertilization, will be
needed to replenish global grain inventories.

Based on crop year data. For exam ple, 12F refers to the 2012/13 crop year.
Source: USDA
Last updated: Jun 4, 2013

Fertilizer 101

Agriculture

World Grain Stock-to-Use Ratios

Overview of PotashCorp and Its Industry

Agriculture

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Selected Crop Commodity Prices
Broad Strength in Global Crop Prices
With supply tight for many agricultural commodities, prices remain well
above historical levels. Although prices have been volatile in recent years,
we believe they are strong economic signals to farmers around the world
to focus on improving production.
Since production increases must be sustained to remedy low grain
inventories, elevated crop commodity prices are expected to remain for
the coming years. Higher food costs generally encourage countries
seeking self-sufficiency in agricultural production to adopt improved
farming practices â&#x20AC;&#x201D; including balanced fertility.
See current crop commodity prices

Source: World Bank, PotashC orp
Last updated: Jun 4, 2013

Fertilizer 101

Agriculture

Selected Crop Commodity Prices

Overview of PotashCorp and Its Industry

Value of Fertilizer

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Effect of Crop Production Factors on Yield Gains
Half of Food Production Attributable to Fertilizer Use
Research indicates that about half of world food production is a direct
result of fertilizer application. Irrigation, seed varieties and technology,
cultivation practices, weed and pest control, and planting density
contribute the rest.
However, fertilizers do far more than boost yields; they strengthen plants
and speed growth and maturity. Potash, in particular, improves the
physical quality and taste of many crops.

Source: IPNI
Last updated: Jun 4, 2013

Fertilizer 101

Value of Fertilizer

Effect of Crop Production Factors on Yield Gains

Overview of PotashCorp and Its Industry

Value of Fertilizer

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World Cereal Yields
Opportunity to Increase Yields in Developing Countries
The Food and Agriculture Organization of the United Nations (FAO)
projects that approximately 90 percent of the increase in global crop
production by 2050 will come from improving yields and increasing
cropping intensity. The greatest opportunities are expected to occur in
developing countries where yields currently lag far behind those in the
developed world.
While this process will not occur overnight, we expect the adoption of best
management practices in these countries will lead to significant yield
improvements over time. These practices include the use of balanced
fertilizer applications, improved seed technology, greater mechanization
and more efficient irrigation systems.
Source: World Bank, FAO , PotashC orp
Last updated: Jun 4, 2013

Fertilizer 101

Value of Fertilizer

World Cereal Yields

Overview of PotashCorp and Its Industry

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Select Markets Nitrogen to Potash Consumption Ratio
Opportunity to Improve Yields Through Balanced Fertility
The disparity between crop yields in developed nations and those in the
developing world highlights the importance of best management practices.
In most developed countries the use of balanced fertilizer application and
other best practices has contributed to significant yield growth.
Since all three nutrients provide unique benefits to plants and work in
synergy with each other, no nutrient can replace another. Obtaining proper
balance among nitrogen, phosphate and potash is key to ensuring that a
plant achieves its full potential. Many developing countries that currently
under-apply potash could make significant improvements in yields for
many of their crops by correcting this imbalance.

Source: Fertecon, PotashC orp
Last updated: Jun 4, 2013

Fertilizer 101

Value of Fertilizer

Select Markets Nitrogen to Potash Consumption Ratio

Overview of PotashCorp and Its Industry

Value of Fertilizer

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Fertilizer Impact on Crop Yield and Return
Balanced Fertilization Can Provide a Significant Economic
Return
As farmers seek to improve yields, fertilizer is poised to play a significant
role. Based on long-term yield trials, farmers across all areas of the globe
have the potential to capitalize on great yields from the proper use of
fertilizer.
Today, the economic incentive for utilizing proper fertility is significant,
whether that be for nutrient-intensive crops like oil palm in Malaysia or rice
in China.